2. Duration of the Partnership Number of Years Or Until Dissolved

PLANNING A PARTNERSHIP AGREEMENT

The key to a good partner “marriage” is having everyone’s expectations aligned. Many new partners do not discuss exactly what each of their duties will be, let alone how unexpected events will be handled. Below is a list of things you should consider “figuring out” before you start working together. This is not an exhaustive list and you should absolutely consult with an attorney prior to creating/signing agreements or entering any commited business relationship.

1.  Name of the Partnership

2.  Duration of the Partnership – number of years or “Until Dissolved”

3.  Location of office

4.  Capital contribution of each Partner

5.  Whether Partners may make additional contributions

6.  The level at which Capital Accounts of the Partners must be maintained

7.  Participation of each Partner in profits and losses

8.  Salaries, if any, to be paid to Partners and whether or not these salaries are to be treated as Expenses in determining distribution profits

9.  The amounts of any regular Drawings against profits

10.  Duties, responsibilities and sphere of activities of each Partner “in” as well as “on” the business

11.  Prohibition of outside business activities by Partners that would be in competition with the Partnership business

12.  Who is to be the managing Partner and whose decision will prevail in case of a tie or dispute

13.  Procedure for admitting new Partners

14.  Methods of admitting Junior Partners, without capital, if such a procedure is to be considered desirable

15.  Method of determining the value of Good Will in the business, in case of death, incompetence, or withdrawal of a Partner or dissolution of the Partnership for any other reason

16.  Method of liquidating the interest of a deceased or retiring Partner

17.  Age at which a Partner must withdraw from active participation, and arrangement for adjusting his salary and equity

18.  Whether or not surviving Partners shall have the right to continue using the name of a deceased Partner in the Partnership name

19.  Period of time in which retiring or withdrawing Partners may not engage in a competing business

20.  Basis for expulsion of a Partner, method of notification of expulsion, the disposition of any losses that arise from the delinquency of such a Partner

21.  How will the event of protracted disability of a Partner be handled?

22.  Whether the Accounts are to be kept on Cash or Accrual basis, and if on Cash basis, the method of compensating Partners who withdraw or retire for income realized on services rendered, but not invoiced at the time of their withdrawal or retirement

23.  The fiscal year of the Partnership

24.  Whether or not Interest is to be paid on the debit and credit balances in the Partners’ accounts

25.  Where the Partnership cash is to be deposited and who may sign checks

26.  Whether or not all Partners shall have access to the Books of Account

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